Emerging Trends in Dubai’s Rental Market for 2024

Dubai, known for its luxury and technology, has in recent decades become one of the fastest growing megacities in the world.

It seems that everyone wants to live, buy, and rent apartments here.

The city attracts investors, real estate buyers, and tenants from all over the world.

Dubai’s rental market is very dynamic.

Let’s take a look at the trends that are visible this year.

Population Growth

The main trend in the residential real estate market, which will most directly affect the development of the market and shape the needs of the end buyer, is the growth of the population of Dubai.

Over the past year, quite a lot of wealthy people with a capital of over $1 million have arrived here.

Such people prefer to live in premium locations, located either near the sea or in green areas with well-developed infrastructure.

On the background of such a situation in these areas are rising rental costs and prices for buying real estate, and there is a slight shift of people who used to live in the current premium locations, a little further from the coast, towards more democratic areas.

Mortgage Lending

Another factor that affects the development of the residential real estate market is the growing number of transactions with mortgage lending.

Despite the fact that many experts say about the growth of volumes and prices, the segment of residential real estate is not all so clear.

Compared to the same period last year, the growth in meters, for example, is really noticeable, and it amounted to 16%, but there is a decrease in sales volumes and price drop compared to the fourth quarter of 2023; for almost the first half of this year, the price of residential real estate fell by 4%.

The decrease in the amount of sales transactions is due to the fact that people are trying to purchase cheaper units.

Property Management

The management of residential real estate is also not so simple. This is largely due again to high operational tasks, obtaining licenses and permits. Therefore, more often than not, people turn to competent management companies regarding the condition of the building, its location, the number of bedrooms, and a number of other factors.

Demand for Sharing

Another notable and promising trend is the demand for sharing. The main purpose of which is to reduce the cost of living through short-term rentals of houses and apartments.

It came from Airbnb, but people liked the concept of staying in familiar home environments during their trips, so many companies have responded to this trend and started to develop this format.

RERA (Real Estate Regulatory Authority)

Another change that is changing the trend in rentals is the updated RERA rental index, which allows for a significant increase in rental rates on existing contracts.

The rental system and the interaction between tenant and landlord in Dubai are regulated by RERA (Real Estate Regulatory Authority).

To ensure transparent and fair rental conditions, the Ejari service was created under the auspices of RERA. It can be used to enter information on renewal, cancellation, transfer, and termination of leases.

The limits of acceptable rental rates on renewal are calculated on the basis of a rental calculator, which compares rates in similar units in the area and calculates the market rental value. The calculator used to include a lot of old contracts (long-term contracts from the pandemic period). Median rates for the neighborhood were below actual market rates.

For the past three years, rents have allowed tenants to stay in their apartments or homes without significant increases in payments. However, now the rent index has been revised, more landlords will be able to increase renewal fees by a larger percentage than before.

The calculator index has been updated for 2024, removing old contracts and causing median rates to rise to reflect current prices. The revision of the RERA index will allow more landlords to raise fees when they update their contracts.

Significant rent increases may force current tenants to start looking for new housing now. Some may move to a more affordable neighborhood or downsize their rental property. Others may consider buying their own property.

Rising rents are likely to affect all areas of Dubai: an increase in the cost of even a few contracts in a particular area will start a chain reaction, and rates will rise throughout the location.

Landlords can only increase rents if they renew their leases. This means that many tenants will not face a rent increase until the end of this year or the end of their current lease.

Rise of Suburbs

The next trend is moving to the suburbs, as most prospective residential property owners want to move from central and upscale areas to cozy suburban residential areas in Dubai such as Jumeirah Village JVC, and Arjan due to affordable prices and increased living space.

And there has also been a significant increase in the number of first-time buyers of residential properties in Dubai due to the record increase in rental prices due to increased demand. Thus, renters are becoming residential property owners, opting for apartments and low-cost townhouses in suburban areas, costing up to three million dirhams.

Integration of 5G

In 2024, the integration of 5G, Internet of Things (IoT), etc. technologies into residential spaces continues, and the choice of online platforms for buying, selling, and renting real estate is expanding.

Conclusion

It is obvious that in 2024 the real estate market in Dubai continues to develop intensively, change, and new trends are emerging in rentals. This city continues to attract people from all over the world. Following the trends helps to find the best option for real estate rentals in Dubai.